S&P 500 Earnings Set to be Hit by Production Costs

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S&P 500 Earnings Set to be Hit by Production Costs

Our chart shows the past and expected earnings growth by sector of the S&P 500 companies. Realised earnings growth is shown for March 2018 to March 2019, while expected earnings, based on financial analysts’ expectations, are shown for June 2019 to December 2019. The expected fall is due, in part, to a rise in production costs. While the fall will be broad, three sectors (technology, consumer goods and industrials) are actually set to see a contraction of between 2% and 11% in their Q2 earnings, without discounting the potential impact of an intensification of the trade war. This situation contrasts sharply with last year, during which earnings were rising at a solid 20% average pace.

Market Chart 04.06.2019
Source: Unigestion, Bloomberg. Data as at 4 June 2019.

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